Knowledge at Wharton posted an in depth write up showing the company Amazon’s next
business, private label grocery business.
The article is long and you can read it here, but here are a few bites:
A huge market opportunity awaits online retailer Amazon as it plans to launch its own private-label brands of perishable groceries including milk, cereal and baby food. However, the e-commerce giant must overcome challenges in quality, the distribution logistics of perishables and customer preferences that the firm hasn’t previously faced.
Amazon sought trademark protection in early May under its Elements brand for products like coffee, soup and pasta, according to the Wall Street Journal report. The U.S. market for private-label packaged goods was worth $120 billion in 2014
Unlike with delivering books or music, the quality bar is set much higher for food items, said Nicholson. “When we are talking about melons or fruit or private-label yogurt, most of us have very specific likes and perhaps dislikes.” Also, in certain food categories like melons, avocados and other fruits that can easily become bruised, most customers may want to see what they are buying